Black Banks and the Bailout

-For banks who held investments in Fannie Mae and Freddie Mac preferred stock became losses when the government took over these giants, capital losses from these investments may be deducted from ordinary income; and if a bank has dropped to a lower capital level, the Treasury can inject capital into the institution. The ICBA estimates nearly 22% of community banks made these investments, losing $5 billion.

None of the three B.E. 100s banks included in this article held preferred shares of Fannie Mae or Freddie Mac.